Fla. high court upholds nuclear-power surcharge law

Duke Energy, which serves more than 600,000 customers in the… (Vragovic, Will, Orlando…)

May 2, 2013|By Jim Saunders, News Service of Florida

TALLAHASSEE — The Florida Supreme Court rejected on Thursday the challenge to a controversial law that allows electric utilities to collect money from their customers for nuclear-power plants that won't be built for years — if ever.

The unanimous ruling, in a challenge filed by the Southern Alliance for Clean Energy, found that the 2006 law did not violate the Florida Constitution by shifting too much decision-making power to the state Public Service Commission. Also, it upheld PSC decisions that allowed Florida Power & Light and what was then known as Progress Energy Florida to collect $282 million in nuclear-project charges from their customers in 2012 alone.

"Authorizing recovery of preconstruction costs through customer rates in order to promote utility company investment in new nuclear power plants, even though those plants might never be built, is a policy decision for the Legislature, not this court,'' the 21-page opinion concluded.

The ruling was released about an hour before the Florida Senate gave final approval to a bill that would make certain changes to the law, which has become a particularly heated political issue in the Tampa Bay area. Most Progress Energy Florida customers live there, though more than 600,000 are in the Orlando area.

The changes in the newly approved bill stop short of repealing the law or requiring refunds for customers, as some critics of the law had sought.

FPL and Progress, now known as Duke Energy, go before the PSC each year for approval to collect varying amounts of money to cover expenses such as licensing work on proposed nuclear projects. Ordinarily, utilities have to wait until a power plant is operating to recoup their costs from customers, but the 2006 law allows nuclear costs to be collected in advance.

Utility officials say the advanced collections are needed, at least in part, because of the large upfront costs of nuclear projects. The Legislature approved the law to try to encourage construction of new nuclear plants in Florida for the first time in decades.

Much of the controversy centers on a Duke proposal to build two reactors in Levy County, about 90 miles northwest of Orlando, and an FPL proposal to build reactors in south Miami-Dade County. While the utilities have been collecting and spending money on those projects, there is no guarantee the reactors will be built. Part of the money, however, also has gone to projects to upgrade already-existing FPL nuclear plants, and some went toward the expansion of Duke's Crystal River nuclear plant, which has since been damaged beyond repair and will be shut down permanently.